When a Chancellor is out of ideas, they always do the same thing. They announce they will be cutting red tape. And so, we have this report in the FT this morning:
Rachel Reeves is to unveil a “blitz on business bureaucracy” in a renewed push to cut red tape that she claims will save British companies nearly £6bn a year.
Reeves will tell the first Regional Investment Summit in Birmingham on Tuesday that the government will be scrapping “pointless paperwork” and “needless form-filling” for small businesses.
Will that change the fortunes of Britain's small businesses? No.
Who will capture the gains (if there are really any to be had)? Business owners.
Who will pay the price? People doing admin, although the incremental gains will be so small that there will be no real change in employment cost, so how the saving of £6 billion, or roughly £1,000 per small business, can be estimated is very hard to work out.
And will anyone notice? No, of course not.
But we might see adverse consequences. Maybe less tax will be paid. Or weaker employment statistics will be collected. Or, maybe, protections for some workers will be reduced. So there could be knock-on costs.
But whatever the outcome, all of this reveals one thing, which is that Reeves is truly possessed of the mind of an accountant. When a person with such a mentality, who really does not comprehend what business is all about, as Revees clearly does not, thinks about how to effect change, all they do is cut staff first and admin second. But not once, ever, can they think of how to add value.
And that is what we have, a Chancellor who cannot add value. And that is Labour's failure in a nutshell. As a government, they have not added an iota of value to the UK.
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With the feeling of being stuck in a Groundhog Day of UK Politics (no matter who is in power), the lyrics of the great Leonard Cohen need regular replay:
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows
[Verse 2]
Everybody knows that the boat is leaking
Everybody knows the captain lied
Everybody got this broken feeling
Like their father or their dog just died
True
And now I have an earworm for the day
Staggering.
It’s all been done before. I’ll leave it to a hero of mine to explain what is going on here and why it is wrong:
“As with any target, in the pursuit of this purpose managers actually make performance worse—by ‘managing costs,’ for example, they create (more) costs. If only they knew. In pursuit of economies of scale, managers of service organizations build factories to handle work and worsen service, but they remain unaware of the extent of the damage, because their measures, being activity – rather than purpose-related, keep them blind. ”
― John Seddon, Freedom from Command and Control: Rethinking Management for Lean Service
It is not an over-exaggeration to see ‘purpose thinking’ closely related to ‘solution thinking’.
And those costs that they are cutting – well, isn’t that some of your GDP and growth going out the window?
Staggering.
Much to agree with
Can I suggest that any budget or regulatory change which affects less than, say, 3% of the budget is insignificant and shouldn’t be publicised as meaningful?
This supposed £6 billion saving, by “cutting redtape”, is approximately 1/2% of the tax take, and about 0.25% of the economy. And that’s assuming the estimate is right and there are no foreseeable or unforeseen consequences of this move. Just the petty-mindedness makes me scream!
Feel free to scream.
You will not be alone.
Peter Kyle this morning eagerly egged on by Nick Robinson proudly parading ‘we will let AI rip’, and ripping up red tape for the implementation of Small Modular Reactors – (which have been promised for years yet still don’t exist).
As Paul Lewis said, this is the 94th chancellor/prime minister that has vowed to get rid of red tape. That’s the same lack of regulation that brought us the great financial crash of 2008 and the Grenfell Tower disaster.
Its criminal that they haven’t invested in things that we need and which promote growth – but they are investing – in massive white elephants such as Sizewell nuclear, carbon capture and storage, small modular reactors, etc.
They need to triple investment in renewables, to invest in Norther Rail, to employ all the unemployed doctors etc, to build the hundreds of thousands of (social) housing that have planning permission still unimplemented.
You can predict the kind of things they keep announcing – things which ‘don’t cost money’, like ‘getting rid of red tape’, ‘improving productivity’. And of course ‘attracting ‘foreign (asset stripping) investment’.
But they will completely ignore all the wasted resources we already have, including 7 million people on health waiting lists, 2 million suffering long covid and others with continuing effects of covid on heart, lungs and brain etc etc.
Thanks
Today my wife and I did our 2024-25 self-assessment returns for HMRC and we both have some tax to pay before Jan 31st.
Now I understand MMT, and realise that I am just handing my overlords their tally sticks back to burn, I’m a remarkably demotivated tallystick returner, especially as the wealthy get to keep so many of their tally sticks, but never spend them where it would do some good nor do the government prioritise the collection and destruction of tally sticks to reduce inequality or their creation and distribution to do good.
This makes me angry and I want to get my own back, relatively powerless though I am.
I’m doing my Gift Aid sums, to redirect as many of my available saved tally sticks to places of my choice, where they can do some good before things get a lot worse. As the government won’t spend their tally sticks properly, I’m trying to delay the destruction of mine for as long as possible and let other people use them.
Tally Ho!
(With thanks to Steph Kelton for the tally stick analogy in her documentary recently).
To coin a phrase from our very own Prince of Darkness, Peter Mandelson,
“I never let a day go by without, in some small way, doing something to undermine neoliberal economics.”
“As a government, Labour has not added an iota of value to the UK” needs printing on a T-shirt.
🙂
With reasons why not printed on the back.
Has anyone ever done a scientific study of cause and effect in politics and economics? I assume so, many times, but we live in a world of absolutist promises from politicians. That if they do something, it will achieve what they desire, but there is wide ignorance of the knock on effects. Over time, these usually make things much worse. The most obvious are spending cuts that take money out of the economy, typically from those that need it most. In what way is that good? Especially for a Labour government.
Politicians either do know, or they don’t. If they do, then they are lying. If they don’t, then they shouldn’t be doing the job.
Your question assumes society can be studied in a scientific way. I do not think it can be. Sorry.
The other thing they do is mess around with “vocational qualifications”.
I totally agree with your post, however I have one question. Onebehalfthe accountants and accounts workers, what have they done to be compared with Rachel Reeves. We may not be as bright as economists, but we don’t necessarily have the brains of a rocking horse like Ms Reeves.
Sorry
But I have met s8me mindless accountants in my time
We’ve all met mindless folk in most professions, but that doesn’t make them all mindless, any more than the fact that many economists bury their heads in the sand and support neoliberalism makes all of them mindless , otherwise we wouldn’t have your thoughts.
The fact that there are three distinct types of accountants, charity, corporate and those that work for councils show they are diverse in attitudes and intelligence, just like other professionals.
Ok
I stand corrected!
There is an awful lot of “red tape” in parliament. Most of it designed to stop MPs interfering with the operation of the Downing St. juggernaut. When the executive want to pass nasty repressive laws they seem to be able to rush them through both houses in 24hrs. When a good piece of progressive legislation comes along, it is either strangled at birth or delayed and diluted into nothingness by endless whittling from the whips.
Can’t we turn Parliament into a heritage attraction for tourists, like Jorvik or Beamish, and set up something efficient in the Midlands? Those MPs who don’t want to make the move could be offered jobs in Westminster as guides and heritage actors. Reeves could look after the costumes (she already has quite an extensive wardrobe) and Starmer could be chief guide for Downing St.Tours.